Pakistan, IMF reach staff-level deal on $1.2b loan
Pakistan and the International Monetary Fund have reached a staff-level agreement on $1.2 billion two loan tranches after Islamabad agreed to promptly phase out fuel subsidy scheme, bring improvements in social and health sector spending, and enhance governance of the state-owned companies.
“The IMF team has reached a staff-level agreement with the Pakistani authorities on the fourth review of the 37-month Extended Arrangement under the Extended Fund Facility (EFF) and the third review of the 28-month arrangement under the Resilience and Sustainability Facility (RSF), according to an early morning statement issued by the IMF.
It added that the staff-level agreement is subject to approval by the IMF Executive Board. Upon approval, Pakistan will have access to about $1billion under the EFF and about $210 million under the RSF, bringing total disbursements under the two arrangements to about $5.7 billion.
The IMF team was led by Ms. Iva Petrova and held discussions under the 2026 Article IV consultation and on the fourth review under the Extended Fund Facility (EFF) and the third review under the Resilience and Sustainability Facility (RSF) in Karachi and Islamabad from September 23 to October 7, 2026.
Non-compliant traders to face pkr 150,000 penalty
As 100 new retailers submitted returns under the fixed tax scheme and paid an average of Rs32,000, the Federal Board of Revenue (FBR) decided to move against non-compliant shopkeepers under the old law and planned to serve them first notice with a Rs150,000 penalty.
The Rs150,000 penalty with the notice to file income tax returns on the expiry of the extended deadline will be many times more than the first-month penalty of Rs10,000 under Prime Minister Shehbaz Sharif’s third tax scheme for retailers in the past four years.
The FBR management plans to map 30,000 traders, who should receive the first notice – a target that seems over-ambitious. Government sources told that after the failure of the new tax scheme, the internal blame game has begun. In a meeting, they said, the FBR administration described the scheme as not implementable. FBR authorities were of the view that no effective punitive measures had been given in the scheme to force traders to become filers. The Rs10,000 penalty in the first month was many times lower than the penalty under the Income Tax Ordinance for not filing income tax returns and the wealth statement, according to them.
The government had offered traders to pay just 1 percent fixed income tax or a minimum of Rs25,000 in return for exemption from audit and the facility to deal in cash by not installing the digital machines. As of Wednesday, only 100 new traders had joined the scheme and paid Rs3.2 million in income tax as their full and final liability for tax year 2026 that ended in June.
Gross domestic product share no measure of farm tax
Whether agriculture contributes enough to Pakistan’s tax revenues compared with its share of the economy has long been a recurring debate in the country’s economic discourse. However, agricultural experts argue that the sector’s tax potential cannot be judged simply by its contribution to GDP, as farmers’ actual profitability is shaped by volatile crop prices, yields, input costs, weather shocks and changing market conditions.
They cautioned that treating the value of agricultural production as equivalent to taxable income could produce unrealistic revenue expectations, particularly for Pakistan’s millions of small farmers who often sell crops at prices below official or expected rates.
Mahmood Nawaz Shah, President of the Sindh Abadgar Board, said the fundamental distinction in the taxation debate was between economic output and actual farm income.
Minister meets a Russian delegation
Federal Minister for National Food Security and Research Rana Tanveer Hussain held a meeting with a delegation from the prominent Russian agricultural and agrochemical company, Schelkovo Agrohim. The delegation was accompanied by the second secretary and other officials of the Russian embassy.
The meeting focused on exploring practical cooperation between Pakistan and Russia in seed development, crop protection, pesticides, micronutrients, advanced fertilisers, agricultural research, technology transfer and investment.
Hussain said that Pakistan was seeking agricultural cooperation with Russia that could go beyond imports of finished products and lead to technology transfer, local production, joint research, breeding programmes and capacity building of Pakistani experts. He said Pakistan needed advanced agricultural technologies and seeds that would enhance productivity while demonstrating greater resilience to drought, diseases, pests and climatic stress.
Joint efforts required to accelerate development
Punjab Governor Sardar Saleem Haider Khan has said that closer cooperation, continuous consultation and joint efforts between the government and the business community can further accelerate the pace of economic development. He said the business community was playing an important role in the national economy and the government was committed to working closely with the private sector to promote industry, trade, investment and exports.
He was speaking to a delegation of the Lahore Chamber of Commerce and Industry (LCCI), led by President Ali Hussam Asghar and comprising SVP Sardar Usman Ghani, VP Chaudhry Khadim Hussain and executive committee members. The governor remarked that Lahore’s business community was an important partner in Pakistan’s economic development. He said that meaningful progress in industry, trade, investment and employment could be achieved when the government and private sector move forward with mutual trust, consultation and cooperation.
He underscored that the Governor House would remain accessible to the business community and he would convey their proposals and concerns to the relevant federal and provincial authorities so that business activities could be further promoted.